A part of the Government sees cryptocurrencies as a fraud, whilst another group supports cryptographic and new technologies as a way to invest money
Since some months ago, different departments of the Indian Government have been discussing about cryptocurrencies. There is not an agreement about if these digital assets could be allowed or not in that country.
According to local press, the Government of India started the consultations to its Ministries about a bill to ban cryptocurrencies and regulate official digital currencies. This action could mean that the Government is renewing its efforts to completely ban public cryptocurrencies.
Government officials say they are aware of the new bill details. They affirm that several government departments in the country support the idea of a complete ban on the issuance and trade of cryptocurrencies in that territory.
The prohibition of making transactions with cryptocurrencies is reflected in a bill whose name is Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019, as it was detailed by government sources to the Indian local media.
Officials said that the Department of Economic Affairs (DEA) of India, the Central Board of Direct Taxes (CBDT), the Central Board of Taxes and Indirect Customs (CBIC), and the Investor Education and Protection Fund Authority (IEPFA) are in favor of the ban.
In the next weeks or months, it could be known if the bill was approved or not. This final bill, which will be based on the comments of the departments consulted, would be proposed to the next government in May, after the national elections, according to what the sources indicated.
“Protection” for Investors
The country’s Ministry of Corporate Affairs recently provided comments to the Department of Economic Affairs against the use of cryptocurrencies. This government department alleged that “the majority” of cryptocurrencies are executed as Ponzi schemes to defraud investors.
Also, Anurag Agarwal, CEO of the Investor Education and Protection Fund Authority (IEPFA) said: “When it comes to investor protection, the IEPFA has to take a position against certain things. Against the Ponzi schemes we are taking a position. We believe that cryptocurrencies are a Ponzi scheme and for that reason they should be prohibited”.
In April 2017, the Government of India established an interdisciplinary committee to investigate about the cryptocurrencies topic, their use and way of operating. As a result of that investigation, in October of last year, the decision about prohibiting private cryptocurrencies emerged and some government departments decided to be against cryptocurrencies.
However, by then the committee was not in favor of a total ban, but it was considering the possibility of legalizing cryptocurrencies with strict rules. Even Indian banks were banned from operating with cryptocurrencies.
In this way, there is evidence of a lack of consensus until the moment. Even when there is a warning of a possible ban to cryptoactives, the Government of India also showed interest in developing its own official digital currency. This is an initiative contemplated in a bill.
But the situation with blockchain technology is different. Last Thursday, April 18th, The Reserve Bank of India (RBI) announced a test environment for new platforms. Its main objective is to encourage the development of blockchain technology in the country. Despite this, cryptoactives were not taken into account. Any cryptocurrency, exchange or investment service will be left out of the proof. The road to the final decision continues.
By Maria Rodriguez